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Full-Text Articles in Finance and Financial Management
The Federal Reserve’S Financial Crisis Response E: The Term Asset-Backed Securities Loan Facility, Rosalind Z. Wiggins, Andrew Metrick
The Federal Reserve’S Financial Crisis Response E: The Term Asset-Backed Securities Loan Facility, Rosalind Z. Wiggins, Andrew Metrick
Journal of Financial Crises
Securitization is a process that allows banks and other lenders to package loans and sell them as bonds called asset-backed securities (ABS), removing them from their balance sheets and immediately generating cash for new loans. ABS are an important component of the financing cycle for many types of loans to households and small businesses, including mortgages. In the fall of 2008, financial markets began experiencing disturbances as the effects of the U.S. subprime market meltdown spread. The ABS market froze decreasing the volume of new loans to households and small businesses. The Federal Reserve became very concerned about the potential …
Fomc Playbook: The Only New Game In Town?, Thomas Lam
Fomc Playbook: The Only New Game In Town?, Thomas Lam
Sim Kee Boon Institute for Financial Economics
In light of the Covid-19 pandemic, the Federal Open Market Committee (FOMC), while taking more aggressive actions, seems to have stuck more or less to the standard playbook of responding to “unusual and exigent circumstances”. This essentially calls for slashing conventional policy rates to their effective lower bound, accompanied by forward guidance, embarking on asset purchases, rolling out emergency liquidity facilities and experimenting with lending programmes. But policymakers, with the required US Treasury backstop, have also introduced more creative programmes to encourage credit extension and reached into different market segments.
Guarantees And Capital Infusions In Response To Financial Crises B: U.S. Guarantees During The Global Financial Crisis, June Rhee, Andrew Metrick
Guarantees And Capital Infusions In Response To Financial Crises B: U.S. Guarantees During The Global Financial Crisis, June Rhee, Andrew Metrick
Journal of Financial Crises
During 2008-09, the federal government extended multiple guarantee programs in an effort to restore the financial market and contain the panic and crisis in the market. For example, the Treasury provided a temporary guarantee program for the money market funds, the FDIC decided to stand behind certain debts and non-interest-bearing transaction accounts, and the Treasury, the FDIC, and the Federal Reserve agreed to share losses in certain assets belonging to Citigroup. This case reviews these guarantee programs implemented during the global financial crisis by the government and explores the different rationale that shaped certain design features of each program.
Lessons Learned: Edwin (Ted) Truman, Yasemin Sim Esmen
Lessons Learned: Edwin (Ted) Truman, Yasemin Sim Esmen
Journal of Financial Crises
Insights on fighting financial crises from Ted Truman, an expert in responding to the international dimensions of financial crises. Topics include the initial US response to the Global Financial Crisis of 2008-2009 and the utiltiy of issuing Special Drawing Rights (SDR).